Sparking the flame of innovation

Published on IWA blog and in Western Mail on December 22nd

What will 2017 bring? It’ll be the year we trigger Article 50, marking the beginning of our exit from the EU; and Donald Trump will enter the Oval Office as the United States’ 45th president. These are things we know. But 2017 will also bring changes that many of us can’t even imagine. And whilst the bounds of these technological advancements are unknown, their impact on our lives is not.

Earlier this month, I raised concerns with Welsh Economy Minister Ken Skates that an estimated 700,000 jobs in Wales are at risk from being made defunct by automation. Human hands and - with the eruption of computers being able to learn for themselves – human brains, that are in danger of being replaced by machines and algorithms.

This innovation is all part of what is commonly termed the ‘fourth industrial revolution’. Just as the first industrial revolution was marked by our ability to harness steam power; the second by our capacity to mass produce; and the third by the development of electronics and computers; this fourth industrial revolution is the combination of these digital technologies with pre-existing physical and biological systems.

Machines are becoming embedded into every aspect of human life - our money, homes, factories, healthcare systems, workplaces and even bodies are becoming inextricably linked with automated systems. It is the speed at which these ‘cyber physical’ systems are disrupting existing industry - and the scope of this disruption - that is a defining factor of this industrial transformation. Whilst other revolutions progressed at a steady, linear rate, this fourth industrial revolution is progressing at an exponential one. 

But just as it’s crucial we prepare for the risks this disruption will bring, we also need to position Wales at the forefront of the new industries this revolution will spur. 

Achieving this will require a new economic strategy that concentrates our limited resources on the interventions that will have the biggest impact - where growth is predicted, where Wales has existing competitive advantage and and where the benefits of growth can be seen to generate a ‘common good’. 

We also need to ensure that the jobs that are left behind - the jobs that make-up the ‘economy of our everyday’ (in food, energy, housing, tourism and healthcare industries) - are jobs that are worth having. 

In an unpredictable era we need to move away from predictable, orthodox, economic approaches.

Let's dispense with the ‘long-term economic plan’ and instead embrace shorter-term, more agile, rapid-response, approaches which adapt easily to changed circumstances. 

As Sir Terry Matthews has advocated in the Swansea Bay City region, we need to shift our focus away from the familiar - new roads and business parks, and towards driving innovation - and instead link up businesses with the cutting-edge research taking place in our universities, facilitating partnerships that will solve real industry problems, as well as exploring the economic challenges and possibilities that remain unknown.

The challenge is how do we embed ‘innovation’ into our systems and our thinking. Some are advocating an arm-length body for Wales to take the lead, I think we need to be taking a more decentralised and flexible approach. 

We need an approach that recognises Wales’ economy isn’t a homogenous monolith, but rather a collaboration of multiple hubs of industry. In Scotland, they’ve achieved this through the establishment of university-led Innovation Centres. It’s an approach that could work in Wales, too. We could draw on our diversity - from Swansea’s academic excellence in engineering, to the outstanding research underway in Aberystwyth on sustainable food production, and Bangor’s leading contributions in the field of neuroscience. 

We need multiple minds sparking off each other, trying different approaches in different parts of Wales. Just as I have been critical of a UK economic strategy which concentrates wealth in the south east of England, and relies on that to trickle down to the other parts, we must be critical of any strategy that focuses efforts in just one corner of our nation. Further and Higher education institutions are natural partners in achieving this.

We need to introduce agitators within our existing governance structures too - at local, regional and national levels of government. People who understand the nature of the change already underway and who aren’t afraid to take risks. People who have the brains, the capacity and the personality to drive buy-in and to bring others with them. We are a creative nation - we need to find ways to celebrate and leverage this creativity for our common good.

If 2016 has taught us anything, it is that there is a deep disaffection for a business as usual approach. We must meet this cry for change with an economic message that commands confidence that things can be better for all our communities.

2017 will be a time of big change - politically, economically and technologically. Let’s seize this opportunity to make these changes work for Wales - and to establish ourselves as the UK’s Western Furnace of Innovation and Industry.  

Lee Waters is the Welsh Labour & Co-operative AM for Llanelli